Legislative and Litigation Update: Do You Believe in Magic?

1. ______________ Legislative/Litigation Update Do You Believe in Magic?NATOA Regional WorkshopLos Angeles, CaliforniaJune 5, 2003 ______________ Michael R. Bradley Creighton Bradley & Guzzetta, LLC 444 Cedar Street, Suite 950, Saint Paul, MN 55101 P/(651) 379-0900 ext. 2 F/(651) 379-0999 bradley@creightonbradley.com

2. Franchise Fees on Cable Modem Service • Comcast v. North Suburban Cable Commission • Facts • Cable Franchise – 5% franchise fee on all revenue derived from the operation of the Cable System • Definition of Gross Revenues specifically includes Cable Modem Service • Commission brought noncompliance proceedings • Held Comcast in violation of franchise • Drew on Letter of Credit • Minnesota Court of Appeals, Court of Appeals No. ____ • Petition for Writ of Certiorari • Filed May 27, 2003 • U.S. District Court • Complaint for Declaratory and Injunctive Relief • Filed May 27, 2003

3. Franchise Fees on Cable Modem Service • City of Chicago v. AT&T Broadband • Facts • Cable Franchise requires franchise fee on all revenues “derived directly or indirectly from the operation or use of all or part of a cable television system” • FCC Declaratory Ruling • Cook County Circuit Court • City brought Complaint for Declaratory Judgment • Procedure and Venue issues • Removed to U.S. District Court • U.S. District Court • City Motion to Remand to State Court Denied • Pre-trial

4. Local Authority overOpen Video Systems (“OVS”) • Lakedale Telephone • Claim that OVS is not subject to any local regulation • Filed for OVS certification • Sherburne/Wright Cable Commission • Filed Comments • Local Government Authority • Challenged Lakedale’s Candor in the Application • Failure to explain why it was not a cable operator • Failure to list all affiliates

5. Local Authority overOpen Video Systems (“OVS”) • FCC Decision • In the Matter of Lakedale Telephone, DA-03-921 • Released April 3, 2003 • Denied OVS Certification • "Nevertheless, we note that the Commission has stated that "management of the right-of-way is a traditional local government function. Local governments should be able to manage the rights-of-way in their usual fashions without the imposition of unique requirements for open video systems.Thus, the Commission has made clear that the open video system certification process does not usurp the authority of local governments to control use of the public rights-of-way."

6. State Legislative Initiatives • Elimination of Franchising Authority • Open Video Systems • Limited Area Franchises • Level Playing Field • Cable Modem Service

7. Telecommunications Section 253 • AT&T v. City of Eugene, 35 P.2d 1029 (Ore. Ct. App. 2001) • City of Auburn v. Qwest, 260 F.3d 1160 (9th Cir. 2001) • Qwest v. City of Santa Fe, 224 F.Supp.2d 1305 (D. New Mex. 2002)

8. Telecommunications Section 253 • Qwest v. City of Portland, 200 F.Supp.2d 1250 (D. Ore. 2002) • TCG New York, Inc. v. City of White Plains, 305 F.3d 67 (2nd Cir. 2002)

9. Telecommunications Section 253 • City of Rome v. Verizon, 240 F. Supp.2d 176 (N.D. N.Y. 2003) • TC Systems v. Town of Colonie, 2003 U.S. Dist. LEXIS 8263 (N.D. N.Y. 2003) • Qwest v. City of Berkley, 2003 U.S. Dist. LEXIS 5863 (N.D. CA. 2003)

10. ______________ Legislative/Litigation Update Do You Believe in Magic?NATOA Regional WorkshopLos Angeles, CaliforniaJune 5, 2003 ______________ Michael R. Bradley Creighton Bradley & Guzzetta, LLC 444 Cedar Street, Suite 950, Saint Paul, MN 55101 P/(651) 379-0900 ext. 2 F/(651) 379-0999 bradley@creightonbradley.com